In a significant move aimed at decarbonising a core industry, the Associated Chambers of Commerce and Industry of India (Assocham) has submitted crucial pre-Budget recommendations for the domestic steel sector. The industry body has specifically called for targeted incentives to promote hydrogen-based steelmaking and enhance access to green finance in the upcoming Union Budget for the fiscal year 2026-27 (FY27).
Key Recommendations for a Greener Steel Industry
Assocham's proposals, detailed in its submission dated 08 January 2026, outline a multi-pronged strategy to curb emissions and modernise steel production. Beyond the headline push for hydrogen technology, the chamber has advocated for concrete policy support in two other critical areas.
The recommendations strongly suggest introducing financial incentives for the adoption of advanced waste-heat recovery systems across steel plants. These systems capture and reuse excess thermal energy generated during manufacturing, significantly improving overall energy efficiency and reducing the carbon footprint of operations.
Furthermore, Assocham has emphasised the need to facilitate the establishment of renewable captive power plants dedicated to steel manufacturing units. Shifting a substantial portion of the sector's massive energy demand away from fossil fuel-based grid power and towards on-site renewable sources is seen as a vital step for achieving long-term sustainability goals.
Focus on Hydrogen and Financial Mechanisms
The call for incentives in hydrogen-based steelmaking underscores a global shift towards using green hydrogen as a clean reducing agent, replacing coal in the iron ore reduction process. This technology, though in nascent stages, holds the promise of virtually carbon-free steel production.
Parallelly, the demand for robust green finance frameworks is aimed at easing the capital burden on steel companies undertaking these expensive technological transitions. Assocham's input signals that accessible and affordable financing is as crucial as the technological push itself for a successful industry-wide green overhaul.
Implications for India's Industrial and Climate Goals
These pre-Budget recommendations arrive at a pivotal time. India's steel sector is a major contributor to the nation's industrial output but also to its greenhouse gas emissions. Aligning the industry's growth with the country's climate commitments requires substantial investment and innovation.
By formally urging the government to incorporate these measures into the FY27 Budget, Assocham is highlighting the private sector's readiness to collaborate on a green transition, provided a supportive policy and fiscal environment is established. The government's response to these suggestions will be closely watched as an indicator of India's seriousness in pursuing low-carbon industrial development.
